Mumbai, Mar 30: ITC Threadneedle Mutual Fund is announcing an interim dividend of 14.5 per cent for its High Interest Fund. The High Interest Fund is an open-ended income fund of ITC Threadneedle and is invested in short term debt instruments. The latest NAV of the scheme as on March 30 is 11.44 as against a face value of Rs 10.So far this year, the corpus of this fund has risen from an initial figure of Rs 2.70 crore to Rs 16 crore, which translates into a rise of about 43 per cent. The investment pattern consists of 40 per cent in bonds and the balance 60 per cent is held in cash. The cash component has risen substantially after the January 16 monetary policy.
Responding to a query, ITC Threadneedle mutual fund managing director Richard Overton said, "We are holding 60 per cent of our investment for this fund in cash because we believe that the interest rates will shoot up again and in that case we will be able to gain if we hold our investments in cash. There is a tremendous pressure on interest rateseven though the government wants to bring it down. We are of the view that this will protect the portfolio against further rises in interest rates and give it an opportunity to invest in longer term instruments at a later date".
Another scheme from the same stable, ITC Threadneedle Top-200 fund, an open-ended scheme with capital growth as objective, is one of the top performing equity fund in the industry with a current NAV of 12.82. Both, these funds have been ranked the best performing funds in their respective categories since inception till December 1997, by Micropal Emerging Market Fund Monitor.
The ITC Threadneedle Top-200 fund has shown a growth of 32.7 per cent since launch as against the Sensex's 11.7 per cent. That means the fund is beating the Sensex by almost 21 per cent.
According to Overton, RBI on January 16 tightened the noose on liquidity by cutting the CRR by 2 percentage points and a sharp rise in interest rates to protect the rupee. But, if this action proves to be sufficient andinterest rates fall again the financial markets should perform. However, if rupee pressures continues, the policy options before RBI will be extremely difficult and none of its choices is likely to attract any foreign investment in the short term.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
